Gemstones and Jewelry
Appraisals, for our purposes, are descriptions and evaluations of gemstones and jewelry. They can be either good or bad. Good appraisals are those prepared by professionals, with training in this area of expertise, which would provide complete descriptions of the items being appraised, together with photographs, which help provide a basis for the market value assigned to the pieces evaluated. There are many purposes for which an item might be evaluated, or appraised…the most common of which are “insurance replacements”. Properly prepared, an appraisal for this purpose would protect the owner of the piece in that, they would receive proper compensation should the appraised, and insured piece become damaged or missing. This protection comes by having an accurate and complete description of the item, along with accompanying photographs, provided to the insurance company prior to any such event, which would prove prior ownership and establish the item’s condition, with the goal of ensuring replacement of the item in “like-kind-and quality” goods.
As alluded to above, appraisals come in many “shapes and sizes” and one-size does NOT fit all! In addition to the Insurance Replacement appraisal, there are appraisals for: a) Charitable Contributions, b) Consumer Re-sale, c) Fair-Market-Value, and d) Estate Liquidation, just to name a few. Different considerations must be taken into account when appraising an item for any of these various applications, which can and usually do change the “market value” of the piece being appraised. Other factors that must be considered when using an appraisal are the date of the appraisal, and locale wherein the appraisal was performed. For obvious reasons, an appraisal must be current to be accurate. Markets change and so do the values associated with gems and jewelry. The value of gold and platinum has more than doubled recently within a two year span, which could significantly change the value of an item just based on the actual metal value alone. Insurance companies and industry professionals recommend updating appraisals about every 2-3 years. The specific locale, or market area, in which an appraisal was performed for an item also can influence the appraised value. Local economies vary widely around the country. Just try to compare what the price would be of the same home in the Southeast, verses New England, or out west in California. Wildly different. And so it is with gemstones and jewelry as well, just not in such extremes.
One of the biggest complaints heard from industry professionals about appraisals concerns their poor preparation. They are typically vague in their descriptions, as well as lacking in photographs, thus leaving wide open the door for interpretation. They also are frequently grossly over-valued. This occurs as the retailing merchant provides an “appraisal” with the goods sold, that reflects some imaginary price for this item that is pure fantasy…in-other-words…BS! These unscrupulous retailers use the “appraisal” as a marketing tool to show the potential customer what a “good deal” they are about to get because the retailer is going to sell this item to them for much less. This scam has reached near epidemic proportions in certain retail venues. But in either case, whether through ignorance, a result of little or no training, or through the unscrupulous, the end result is the same: the appraisal is not worth the paper on which it is printed, and the bottom line is…
THE CONSUMER WILL TAKE THE FALL!
This can occur in two different ways. First, without a proper appraisal, the insurance company can and will default to the lowest possible value that they can assign an insured item which can result in the insured receiving replacement goods that fall short in the actual quality of the original piece. Secondly, adding insult to injury, if the assigned market value is inflated, a higher premium will have been paid by the insured for “over-coverage” of the item. In other words, since premiums are based on the assigned value of the item to be insured, an inflated market value will result in an inflated premium. Thus it is possible…even likely…that someone could pay higher than necessary premiums on an insured item, and then in the event of a loss, receive a lesser quality replacement piece due to a vague, inadequate description on the appraisal. Not good!
Palmetto Gems Appraisal Services
Palmetto Gems & Gemological Services, Inc. provides some of the most detailed, and thorough appraisals in the area. Each appraisal is reviewed by two Graduate Gemologists from the Gemological Institute of America, as well as an American Gem Society Certified Gemologist, trained in appraisal preparation. (See bios in About Us).